tv First Up With Angie Lau Bloomberg November 27, 2014 6:00pm-8:01pm EST
>> no move from opec for crude. oil stocks plunged across europe. the russian currency at an all-time low. owing nuclear, the chinese power company seeking a first of a kind ipo. up, coming tost you live from bloomberg's asian headquarters here in hong kong and streaming on mobile and bloomberg.com. happy friday to you. let's check out mornings this morning. let's go to australia.
not much movement on the asx 200. in the low $70. in new zealand, up 2.2%. the kiwi dollar up .10%. we are counting down the open in korea, less than one hour away. we are waiting for those numbers in this hour. the jobless rate as well as retail sales. futures pointing to a stronger open here. their.lar yen weakening the to the top story now, it's called black gold. this morning there is no shine on this commodity. oil slumped to its lowest since 2009 as opec refused to cut production. in other words, saudi arabia blocked any idea of a cut. john dawson joins us to explain
why and what has been the reaction from the 11 other members. >> they blocked the cut again. 12 member opec, as we know. u.s.iggest picture is the -- market share is going down. if there was a cut, prices would go up. by not cutting, the price rocks, as you have seen. that is why they did not cut. that is the bigger picture. ,enezuela, algeria, and iraq they have budget surpluses and they need to have the cut. the only crucial income is crude exports. this, thelso mention
iraq he minister saying there was a consideration of a cut of about 5% considered over five hours of talks, but it clearly was dismissed. ministerhe saudi oil leaving with a smile on his face, happy with what happened. , rafaela had a comment nadal me a is, that everyone has to make sacrifices. said,gerian oil minister i think for most of us it has been a rather critical time. we have had great concerns for economies that are dependent on crude. clearly that is a big issue for nigeria, which depends on crude exports. iran, we are not angry. it's not in line with what we
want. >> kind of a passive aggressive response. analyst who is't highly respected. opec no longer is supply-side. we are entering a new era for oil prices where the market itself will manage supply and no longer saudi arabia and no longer opec. the reaction was for oil to fall as low as 2009. economies,ller nigeria, algeria, iran, venezuela, they needed a cut. >> let's bring in david real quick. there are still in the financial markets that shake things up like a sharp luncheon oil.
the big piece of news overnight, the latest forecast , they arets short-term barriers. from energythis one analyst, we could see west texas drop as low as 60-70. it could prop up prices if you get something geopolitically or a harsher than expected winter. goldman sachs rates the potential for further decline -- the fundamental issue is the supply glut. standard slashed their forecast and made the case for brent. we're looking at perhaps $68 for the first quarter next year. long a supplyhow glut will stay and who cuts first.
prices -- hello do prices have to get for them to actually start saying it's to being profitable anymore continue drilling and producing all this oil. that level is near are below $60 a barrel. goal becausee production costs are so high. >> about 60. the short-term will likely see oil fall further before it actually picks up. >> take a look at currencies, which ones are taking the biggest hit right now? but you look at the small countries, it doesn't mean that all this is in the interest of opec.
the ruble is at a record low. of norway is the biggest oil producer in western europe. that is at a five-year low. longer. gets >> in terms of the equity space, what are we watching? >> think of cnet and petro china. >> the margins are squeezing significantly. on the flipside, airlines having a rough time. , itn airlines, for example means lower prices for us on the road.
>> regardless if you're up stream or downstream, equipment providers, it is self first, ask questions later. actuallythe guys who go out and explore for oil. i could go to the list, but it's going to take a long time. that is what you see as far as early trade in australia. >> thanks so much. we will check with you guys a little later and see how those stocks are doing. the latest on opec. japan has imported u.s. oil for the first time in four years. the country looks to cut dependence on the middle east. it took delivery of 300,000 barrels last month. american policymakers are under onssures to lift up ban crude as new supplies from
fracking increase global supply. some of the stories making news this morning, japan's prime minister will be making another pitch to voters to participate in an online debate today. the event will be streamed live on seven sites including twitter japan and yahoo! candidates will be looking to address young voters ahead of the december election. china cut rates and pressure is now sitting on the central bank governor to act next week, with inflation at a three-year low. the finance minister is calling for a cut. another factor, growth is expected to slow further when gdp comes out today. economists surveyed by bloomberg expected them to ignore the clamor. among listed hedge funds, none is larger than man group,
managing about $72 billion. in china the stock market has been on a tear over the past few months. stephen engle caught up with of hedgehe perception funds is starting to change. riskier asset class. havehe past few years, we been working closely with the thatators, including china's securities regulator. the china asset management association has been established and they already have 4200 registered members. 1000 of them are actually what we call private sunshine funds, which are basically hedge funds in china. the chinese investors and
regulators are beginning to understand that the hedge fund is about hedging against risk. we are trying to provide products that are less risky with less volatility and stable returns. but regulators want more foreign institutional investors and long-term investors. would you say your horizon on investment is short-term? >> absolutely not. years,r the past three already china's investment profile had already seen great changes. for example, three years ago, it was mostly 95% retail. now it is 85%. it is still very high, but it is down by 10%. >> the concept of hedge funds is to also be able to short when the market the dates. how are the restrictions on shortselling hindering you? respect -- a lot of
a lot of restrictions. onshore money, you can. there is still a lot of deregulation that's going to take place on the horizon. hope that foreign funds coming into china are trading equally as local money. then the opportunity of more funding coming into china will really happen. >> you think more hedge funds are going to be actively involved here? hong kong had 35 new hedge fund set up this year. there are nearly 500 hedge funds and hong kong, more than pre-financial crisis. >> that is for hong kong, but 1200 of them have registered with the a mac, which means a lot more hedge funds have launched locally in china. they are using long-short strategies that will provide a lot of opportunities as well.
. , our next from sydney guest, shane oliver, head of investment strategy at asp capital investors. good morning, shane. let's get your reaction on this opec decision here. you got 58% of people we surveyed expecting this. were you expecting this? i'm a little surprised by it. i don't think the pain has been great enough to invite discipline at opec. the price can go a lot further than you think before it starts to see supply cutbacks. in that context, i don't think you can rule out about $40 a barrel. they do tend to fall a lot further than you think. it will be a while before i think opec gets its act together. orwere talking about six
seven months from now, quite a long time there. what have you been seeing? ,here has been a lot of talk many countries calling for a cut in production. what are we seeing in terms of how this is going to affect the market? was it already priced in? quick sets a good question, probably not. overnight we did see good gains in european shares. one of them was the fall in the oil price. i think you're going to see this dichotomy, the energy producers coming down, but the rest of the market will get a huge lift. when you think about the global economy, russia, the middle east, energy producing company -- countries in asia. for the rest of the world, for most of asia, the u.s., japan, europe on this is actually very good news and it could boost
global growth by around .5% and for the federal funds to -- timel falls for the first to a low. you expect rises to go even further down? >> i think it's anyone's guess, to be honest with you. what i know is we are not seeing supply cutbacks. if anything, oil producers are responding. toing well, we're going produce more oil to keep our revenue and sales up. that is the initial response. i get the impression the price probably has to go lower before it bottoms out. if you go on the history what happened in the 1980's and the 1990's, we could easily reach $40 a barrel, which was the low at the time of the financial crisis. that was five or six years ago. >> we have some recent
developments coming out of china, pboc rate cuts for the first time in more than two years. yesterday they mentioned they would loosen some more of their monetary policy and scrapped the repo sales there. how is this going to affect australia? >> it's good news for australia. obviously there is a lack of transparency from the pboc, the fact that they had not responded with traditional easing. i think it was affecting australia's growth. what is becoming a lot more transparent is using traditional moves to stimulate the economy. i think that does provide support for australia. there has been a bit of a wobble in the share market so far this week. what the iron ore price does. it is still down at low levels, around $70.
but good news for australia the pboc will have to do more. >> are you expecting more coming out? people are talking about more rate cuts coming up next week. talking more about possible reserve ratios that could be reduced. what are you seeing in the near future here? which i think more downside. the reality is displayed in. we got a clear message of that from the oil price overnight. we've had nearly three years of falls in producer prices. benchmark lending rate will fall below 5% sometime in the first part of next year. in 12 months time it's going to be down around 4.5%. there's still a fair way to go for interest rate in china.
i think the bottom line is we are going to see more easing coming through in china. look out for that. shane oliver, thank you so much, head of investment strategy and chief economist. some other stories making withines around the world, no reports of major confrontations in ferguson missouri art damage to property. there were two days of unrest over the grandeur decision not to indict a police officer in the shooting death of unarmed like teenager michael brown. protesters made their anger known at the annual macy's thanksgiving day parade in new york you take a listen. as the demonstration became more heated, police moved in and wrestled some protesters to the ground who had seven people were arrested. a last-minute agreement on
energy sharing and a handshake between india and pakistan leaders salvaged a summit of south asian leaders in nepal. they shook hands on the final meetdespite refusing to with each other one-on-one. after two days of fruitless talks, the leaders managed to sign an agreement allowing the sharing of electricity supplies across national borders. coming up, we will look at what is giving one japanese property company a strong foundation, when we return. ♪
>> this is a student support business. when a group of kids go to college, you need to find them an apartment. when they go to school, you need ,o help them organize events training, they do all of that. they have raised their net income forecast to $2 million. the operating target is 74% up. 2800 employees based in japan , gets 97% of its revenue from oil expiration. down 12% over two months. >> seeing all that stuff happen in opec, they are possibly going to see some movement there. >> just following the trend.
>> you can't argue with that. >> we saw what happened in australia. are we going to see similar movement in japan, do you think? >> 100%. nippon oil is one of the biggest refiners in japan. >> we will check in with you guys later. that is the verdict from the stock exchange. we will be back in an hour and see how the three stocks we've got here have done. gold, at china's nuclear one of the
>> it seven: 30 in singapore and also here in hong kong. a live look, a beautiful day in singapore today. we are 30 minutes away from the open of trading in south korea and japan. up."re watching "first no commodities were bullish men. oil plunges to his lowest level in four years. going nuclear, the chinese power of its seeking a first kind ipo. an obvious price challenge.
the latest japanese data expecting to show inflation continuing to slow. good morning, some breaking news for you. japan, where inflation has been slowing, let's go to shery ahn with all the details. >> we just have the numbers, core consumer prices excluding fresh fruit now rising 2.9%, in line with expectations. september.ng since 3% in september, and now rising 2.9%, in line with economist estimates. the jobless rate coming in at 3.5%. than analysts had expected at 3.6%. but it is in line with what we saw in september at 3.6%. remember, the cpi going back to the consumer prices, you have to that out the effect of
consumption tax hike back in april. the bank of japan usually takes off about 2%. excludingional cpi fresh fruit is still 2.9%, well below the boj inflation target of 2%. >> let's take a look at the markets real quick. japan is one of the markets we will be watching at the top of the hour, less than 30 minutes away from the opening there. let's see how things are looking there. less than half an hour away. nikkei with a higher open, dropping 18% yesterday at the close. .he dollar yen weakening back to the other top story, oil plunges to a four-year low after opec took no action to ease of global supply glut. oil ministers in member nations
maintained a collective reduction ceiling of 30 million barrels a day i'm a ignoring calls from venezuela for a cut in supply. both rent and west texas crude fell 6% to their lowest level since 2009. >> why are you concerned, if the price comes down, that will help you to fill your car. traitoder.are a ambitiousas set targets to curb carbon emissions by 2030. it would be the equivalent of generatingire capacity every year.
it is due to list in hong kong this month. joseph is here. there is a lot of buzz about this. gn?t is so special about c >> they issued their prospectus yesterday. size.lly it is the they will be raising as much as $3.2 billion, one of the biggest ipos in hong kong in a while. in the utility space, it will be in the top 10 of all asian utilities. there is a lot of buzz in terms of where portfolio managers should be putting their money. it is nuclear, there is no coal or gas. they are still building a lot of nuclear power plant at this very moment.
it's going to become a lot bigger. the biggest nuclear power developer right now. >> you are saying it is strictly nuclear energy. what are the prospects of that in china? >> they are huge. right now china has less than 20,000 megawatts of capacity on the nuclear side. by 2020, they are looking at 58,000. that is threefold over the next six years. problems,pollution 70% of capacity right now is coal-fired generation. china wants to shift away from its coal-fired generation addiction. it needs lance that can run 24 hours a day -- plants that can run 24 hours a day.
from this perspective, the prospects are very good. >> we are heading close to the ipo now. are there any things are issues that investors should be concerned about? ,> unlike other power companies some of the other companies out there, you really want to think about the fact that there is some liabilities which are 10, 20, 30, 40 years from now which you cannot really foresee right now. another one, we all know about fukushima, the sad events there. be human one would resources. will china have enough qualified personnel? enough people in china. we will see how it goes.
thank you so much for joining us this morning on cgn power. time to look at some of the corporate stories making headlines. shanghai shares are expected to resume trading today. proceeds from the sale will be used to develop other areas in the business. fosun says the deal will require government approval. actualer trading minorities but will still deal in derivatives. as part of a larger overhaul to boost profitability. barclays, credit suisse and jp morgan have all made similar improvements. samsung slashed galaxy prices by
over 10%, while apple is the biggest smartphone seller in the country. >> japanese carmakers recall more vehicles over faulty airbags. takingand daihatsu are more than 100,000 cars now. craig is in tokyo. what is behind these new recalls? but to understand the latest recalls, we have to go back to november 13 when honda recalled substantially more cars. the japaneselt of airbag supplier that is under fire of late. the reason they recalled those cars was a death in malaysia of a pregnant woman who was in an accident. the airbag deployed with too much force, and as we have seen
with four previous deaths in the u.s. market, the airbags will essentially explode and shoot metal and plastic shrapnel at passengers. so it's a very scary defect and has been linked to a number of recalls of millions of cars in the u.s. as well as here in japan. here is quite a small recall. toyota recalling about 57,000 me, here in japan -- excuse 57 thousand globally. about 40,000 of those in japan. it's a small additional recall but it's related to the same problem that honda found with that recall just a few weeks ago. they have traced it back to a takata plant the toccat that has now closed. yesterday got news
about other recalls for nissan and suzuki. you said there were several issues. what were the problems there? >> these are actually bigger recalls, but for much less serious problems. almostki you have 350,000 cars, but they need to be repaired for a bracket that may make it difficult to adjust your seat if you are the driver. while that is a big number, it is definitely not as serious as exploding airbags. you also have nissan recalling about 250,000 cars yesterday to repair fuel pressure sensors and fuel pumps. much bigger recalls but for less serious issues with those cars. joining us live from tokyo, thanks for that update. a special focus on tech startups. we have been talking about this all week. to $40lued at up
investors have valued car booking firmuber at $40 billion this week, about the same as delta airlines. our next guest may hold the answer him and is one of the most influential people in the u.k. take industry. let's cross over to singapore where haslinda amin is standing by. >> lookout, silicon valley. , the so-called silicon roundabout with technology firms. this business is quietly becoming one of the most .owerful forces
she is here with me this morning. welcome to my city. we talk about the silicon hearabout, why don't we about the success of silicon valley companies? >> there's a few of us that have toe here to spend a few days get to know the folks here and the ecosystem here to try to build more bridges. there is a lot happening in london. we probably haven't talked about it enough. london is one of the worlds financial capitals and is now becoming one of the tech capitals as well. combine the two and you're talking innovation in financial services, e-commerce, and everything that affects everybody digitally. >> it is getting really difficult to find the talent. iu can hear from my accident, am actually american. it is an issue everywhere in the
digital sector. definition aby experience. what is happening in london is fascinating. banking and with financial services. now we are able to tie them into the internet. we probably have a head start where other people are trying to maintain similar sectors. >> what are you looking for in asia? >> we are looking for collaboration. we are looking for partners. all the companies in london have global concerns. europeanenglish or success stories, they want to be global success stories and global leaders. in order to do that we have to work with the asian markets. singapore is the capital and the hub for that. bridges, to have
partnerships, look for further investment, distribution, and just to work to make sure we can make globally relevant companies. >> now you're looking towards asia, but when you look at asia, is asia good in terms of innovation? >> when i'm in the states are europe, people are underestimating all the creativity and talent here in this region. think about the population a long and all the accelerated production ofd services, whether it's telecommunications, video. all of that actually came from asia first. i think we forget that because we get it mainstream and we don't think about where it started. is aopulation here fantastic early adopter market, and one we can learn from. excited whenyou you look at the market in asia?
is there anything you would potentially put your money in? >> financial services, which is something we have been talking about and most of our conversations today. this being a financial hub, we would like to see more of that. there are lots of ways we do business around the world, including -- including the asian markets, that's very important to what we do in london. population of the here in this region is a good lesson. a huge way to learn about what will happen in our own market. >> i remember in your days at skype, you said fake it until you make it. is that what needs to be done? >> i should probably qualify that for only certain categories. there are cases where you need
to say we're going to figure this out as we go. skype is a good example because a lot of people think about, do you have to be us-based in order to be a global success? skype is a perfect example. legacy issues they had with the founders, they totally ignored the u.s. market. a lot of its explosive growth came from asia first. mentality,o in the because when you look at the culture in asia, is not quite as acceptable. but for start ups, need to experience failures. that is what makes you successful. >> you need to have persistence, resilience, and tenacity. the work ethic in this market is and produce more
resilience than maybe in other markets. people may not be used to fighting against hurdles and really slugging away at it, because they know that's what it takes in order to make a success. it is a state of mind. , but really good branding it's not something for everybody him of whether this architect or in the european and london market. east, becauseok this is where we see all the innovation happening, all the tireless effort. people are working at a pace that is three times of what we see when we look west. we want to leverage all the benefits you have here. >> when you see silicon roundabout and perhaps something similar in asia getting to that stage -- >> i do think london sets the
areas.rk for a lot of that is something silicon valley does not come close to. financial services, banking, within london for years and years, london leads the way and sets the benchmark for that. .> thank you to eileen we are sending it back to you. outore breaking news coming of japan. the country just releasing its latest factory output data. let's go back to shery ahn with the details. >> october preliminary factory output coming in better than expected him a rising 0.2% in october. that is above expectations of a contraction of 0.6%. than expectations of a contraction of 0.6%. that is all affecting the
>> as people across the u.s. and beyond digest the thanksgiving dinner, how do you make sure the turkey you picked doesn't turn out to be a turkey? we spoke to one farmer to find out why some people are willing to pay big bucks for the perfect word. -- for the perfect bird. >> heritage turkeys are truly a natural, sustainable animal. heritage has only been
around about 12 years. a heritage turkey is what we used to call standardbred. , andeat is much darker that's a direct result of physical activity. if you were to compare a heritage turkey with the industrial, commercial white turkeys99.99% of consumed, you now can get a 20 pound turkey. when my turkeys get to market weight, it's 28-30 weeks. the metabolic rate hasn't been changed or mutated. industrial turkey is mated on itstually
own. they get so morbidly obese so quickly, they are incapable of performing the actual act of breeding. even my breeder turkeys are out and pastors. i probably spend 90% of my time watering or hauling feed. right now what they are being fed is an all vegetarian diet. we do not feed antibiotics or growth stimulant. when people buy one of my turkeys, i say just put it in a little pan with a little salt water and roasted. roast it. get more on that story anytime, anywhere. just download bloomberg plus to your mobile or tablet. available on android or apple. if you use twitter, it's even easier to see us.
>> wanted, faster inflation. the latest consumer prices out of japan. energy stocks have opened with a tumble in sydney following a plunge in crude. going nuclear, the chinese power company seeking a first of a kind ipo. welcome to "first up." good friday to you. i'm a yvonne man standing in for angie lau. let's get straight to markets in the asia-pacific.
asx down 1.28% now. iron ore extending the route, below $70. the australian dollar dropping as well. we are looking at japan just opening. the nikkei, let's take a look -- up 0.5% right now. dollar-yen weakening. that new figure coming from japan, breaking news, factory output up 2%. the kospi opening up. openingan won 0.24%. samsung extending the rally from thursday with shares opening up in seoul, up about 7%. you may remember yesterday when they had massive restructuring, buy back about $2 billion, and
selling its chemical business. lots of data out of japan today. shery ahn has been following those stories for us. >> inflation. consumer appliances still in positive territory. this is in line with expectations but slower than 3% we saw in september. cpi measures but consumers actually pay. that includes a sales tax hack -- sales tax hike back in april. we have to strip off those numbers and that would still make it less than 2% inflation target that the boj has for japan. coming in atate 3.5%, that is also below expectations. and below the recorded 3.6% that we saw in the month before.
the problem in japan is not so much about the unemployment figure, but the jobless rate. it is more about the lagging wage hikes. we have seen that average pay has not increased as fast as especially after that consumption tax hike. that is a key issue that prime minister shinzo abe and governor corona have to tackle. we also had a bunch of numbers out this morning. another one is the industrial production. 0.2% in october. if you look at the figures, it is a contraction from 2.9% in september. the japanese government acknowledging that the factory output data is seesawing a bit. still much better than analysts had expected.
>> we are heading into this election now. how important are these numbers? thehe inflation number is key data on price changes in japan before the election. prime minister shinzo abe seeking to renew this mandate on abenomics from the japanese public. a lot of that will have to do with price rises, stepping out of this deflationary cycle that japan has been in for the past two decades. tumbling oil prices, that is not really helping. stripping off that consumption that keeps inflation below the target of 2%. the economy already sliding into recession. the weakening yen is not really helping. that japan is
poorly positioned when it comes to weaker currency. contrary to expectations, japan is no longer an exporting country. exports only make up 12% of gdp. >> shery ahn following that for us. thank you so much. .n other news, india pressure is mounting on the central bank governor to act next week. with inflation at a three-year low, the finance minister is falling -- calling for a cut. growth expected to slow further when gdp is out today. bloomberg surveyed by ignore the clamor. at 8%, india has one of the highest interest rates in the region. japan's prime minister will be making another pitch to voters in an online debate tomorrow. the event will be streamed live
on seven sites including twitter japan, yahoo! end line at 8:00 p.m. local time. candidates will be looking to attract younger voters. japan has imported u.s. oil for the first time in four years as the country looks to cut dependence on the middle east. the delivery of 300,000 barrels last month. american policymakers are under pressure to left the ban on crude. no c to ease the glut -- ut to ease the glut. opec refused to cut production. saudi arabia blocked any idea of a cut. -- joinson adjoins a me to explain why. iraqi oilng to the five percentut of
was dismissed. >> there were no talks of anything higher than that. >> some countries have very low reserves. they rely heavily on crude exports. arabia, qatar, kuwait, don't suffer. powerobviously holds the because they have 30% of opec. they are the ones who decide. this is all about the perception. the bigger picture is a price war with the shale oil boom in the states. if there was a cut in production, the price would go up again. if they don't cut, the price will go down. how do we compete with this? cutting back on production helps
the opec oil story. the man in charge of this gave this comment about what this is and what it is not. years, we haver a very decent price. that does not mean we should really rush and do something. we have to wait and see how the market will settle. we don't want to panic. nigeria bothand called for 2 million barrels per day. the talks lasted five hours. the saudi arabian oil minister walked out with a smile on his face. that wet until june 5 have the next opec meeting in vienna. a long time away. they kept the ceiling at 30 million barrels per day. what is the reaction from the
countries that wanted this cut? --the reaction clearly is the countries that wanted the cut are not happy. , opeca's oil minister president next year, she said, for most of us it has been a critical time. great concerns particularly for economies that are dependent on crude. minister came out and said, i'm not angry. but it is not in line with what we wanted. a little bit of a passive aggressive tone there. >> the venezuelan oil minister said, everyone has to make some sacrifices. reserves there are at 11 year lows. there is concern for those countries that rely on this.
saudi arabia is not poor, doesn't rely on it. the bigger picture, to protect the oil price, we have to not cut. >> let's bring in david. few other things in the financial markets shake things up like a sharp plunge and oil. how are things looking? >> a little bit of a shock. it is hard to make the argument that it was priced in. it was a 50-50 call whether they would cut production or not. given the price action we saw, this right here, forecasts are putting short-term barriers. we could see prices go down before they pick up. the thinking is, at what level do shale producers get hit? at what point do they start saying, it is not viable anymore? when does the supply correct itself? they are calling for a base case for brent at $68 in the first
quarter. a drop sachs has said further. cure no sign we will get a to this issue of oversupply. we are looking at a range between $60 and $70 a barrel over the next two to four weeks. the only thing that could actually help oil prices if we get a harsher than expected winter or some geopolitical flareup. all this depends on how long the supply glut lasts and who blinks first. opec sticking to their guns. producers, at about se guys get hit. that is the level we are watching. right now we are at $68 for crude. >> the influence has switched
again. socgen is very bearish indeed. we are entering a new era for oil prices where the market surplus will manage supply. no longer saudi arabia. >> we saw the reaction from the markets. what are we seeing in currencies? >> the canadian dollar. we are within a few cents. the ruble took a big hit. gets 70% of its public finances from the oil industry. you start looking at the credit ratings. thesent to factor in currencies. norway is the biggest producer in western europe. that is at a five-year low right now. venezuela didn't move a lot.
>> in the equity space, what are we looking at? >> a lot of sectors. -- look at oil producers explorers, refiners, storage, transport, some will get hit more than others. that is what happened as far as the big voice. total, down 4%. think we are down about 7% for these guys. 9:00, watch out for singapore. , that is airlines expected to go the opposite way. that ons, guys, for that opec decision. japan riseprices in at the slowest pace since the ines -- the sales tax hike
good morning. let's take a look at markets in the asia-pacific. japan's nikkei off about 0.75%. the kospi down about 0.2%. the asx down about 1%. a lot of reaction to those japan about factory out output, retail sales. let's wrap up the week with the chief market strategist for -- sorry about that. thank you so much for joining us. let's talk about the japan numbers. factory output down about 0.2%. cpi up 2.9%. we got breaking news around two-year notes falling below
zero. i think the japanese economy is in pretty challenging shape. output is still low. action,e, the whole boj with energy prices falling, that is good news for the japanese economy. in terms of the pressing prices, i think we have extra work in pushing prices down. >> into this election now, what is your take on all this in terms of this delay of the tax hike? does this solidify the fact that we needed this delay? reaction in the economy, i think the delay is justified. abe does have a little more support. with the new cabinet falling aart so quickly, i think
fresh mandate is something he will get in the new elections. >> looking ahead to the next year, people say december is the santa rally, the partying type of month for global markets. what do you see for the outlook? >> we are optimistic on the equity markets as a whole. i think the strong dollar is going to be a game changing event for the markets. although the dollar has been rebounding, 2014 is the come-out party for the dollar. at the same time, with the u.s. economy, the federal reserve starting to raise interest-rate, 2014 could be a very interesting year where we start to see divergence. >> let's talk about the central bank in china. they are cutting interest rate for the first time in two years. yesterday, they said they are slashing sales. your outlook on china, has it
changed? >> from a macro's perspective, we always believed the economy could achieve 7% in growth. if there is a genuine threat of going below 7%, they are likely to step in. from a market perspective, i think the benchmark isn't particularly exciting. we do like sectors such as internet and energy, where there is sufficient policy momentum. >> they are talking about the fact that maybe this first rate cut, there might be more to come, that this might not be enough for china to take control orthis economic growth boosted even more. are we going to see more? are we going to see a cut in reserve ratios? >> i think it does depend on how the liquidity environment plays out.
over the next few months, there will be some short-term operations. after chinese new year, we should get a much better idea of how the economy is operating. immediately, but maybe towards late february, early march, when we start to see a clearer picture of the economy. i think we need a bit more information to make a judgment. >> is china heading into a policy dilemma when you look at these recent developments? they talk about how this is neutral. they try to balance between not reentering the ueled boom and keeping the economy afloat. that is why they have been so cautious with the targeted reserves, with liquidity
injections to specific banks. now they went for a compressed rate cut. muchare between not too and not enough leverage. but at the same time, not to squeeze the economy too hard. >> it seems like a voting on the short term in terms of relief and put a long-term a factor. teletech holdings is that going to affect your attic of a patient in the future? the cost of insurance in the banking sector, all these things are happening in the background. there is a lot happening in the short term. short-term, the recently adopted easing will be seen in the markets. >> thank you very much for
production levels as is not only sent prices plunging, but also the currencies of oil exporting countries. the norwegian krone hitting a five-year low and the canadian dollar falling. some key data out of japan this morning. prices excluding fresh food rose in line with forecasts. ticknal cpi, about one below median forecasts. looking at the yen, we are back above 118. 11 current and former ubs traders are under investigation from swiss authorities including the bank's co-chief and the global head of forex and precious metals. are part of aese broader investigation over currency rigging allegations. no finding of fault has been made against the individuals. ubs declined to comment.
let's get back to the forex market. dollar-yen back above 118. shery will get more on that later on. you have cpi, unemployment, factory output, a little bit of signs of life. below 124.5.e back it is really a friday of dollar strength. those are the story driving your forex markets this friday morning. in with somek other stories making headlines around the world. protestsattered continue around ferguson, missouri. the return car relative calm came after two nights of unrest a grand jury decision
not to indict a police officer in the shooting of unarmed black teenager michael brown. protesters made their anger known at the annual macy's thanksgiving parade in new york. >> [chanting] demonstration became more heated, police moved in and wrestled some protesters to the ground. seven people were arrested. a last-minute agreement -- we are going to talk about energy after the break. tumblingcome, despite iron or prices, rio tinto promising hefty returns for shareholders. we will be live in melbourne with the details. ♪
>> 8:30 here in hong kong. a beautiful friday for you. we are an hour from the open of trading. you are watching "first up." a black day for the black stuff. opecy stocks plummet as continues to pump out the oil. turning on the cash machine, rio cuts spending plans. and going big on nuclear, cgn power is poised to capitalize on
china's ambitious energy targets. good morning, welcome to "first up." let's take a look right now at japan's nikkei up about 0.7%. reacting to new figures, cpi up 2.9%. factory output up 0.2% as well. the kospi down 0.2% right now. let's look at the equities. qantas airlines up 4%. japan airlines close to 4%, reacting to that opec decision not to cut production leading to as a drop ins well the oil prices. we are going to look at that through our show here. let's get to some of our latest stories at this hour. rio tinto offering shareholders some early christmas cheer. a further boost in cash returns.
david joins us from melbourne with details. manage this with iron ore prices tumbling? >> good morning. certainly, rio have been talking to investors this morning. they said the short-term outlook is pretty challenging, but they also promised that in february they will announce more cash returns, increased cash returns to shareholders. one of the ways they are going to do that is by cutting project spending. they will cut capital expenditure to the lowest since 2010, lower than 8.5 billion. investors are giving some flexibility to meet that commitment. delaying construction of a mine in western australia. trend to curbf a supplies due to a surplus?
watchers of the iron ore market have seen the biggest producers -- and rio is the second biggest -- those companies put millions of tons of extra supply into the market. but this isn't geared at that. this is part of a limit on project spending. rio says the mine in western will not get a decision on project approval until next year. that is a $1 billion mine. it would have been a new development. they have said they will continue to ramp up production of their existing assets. they are looking to raise production to 360 million tons. aboutwhat did the ceo say these predators returning after that merger approach from glencore? watchings people are
to see if the company has any response. thus far, he has been fairly guarded in talking to investors. it is interesting that one of the things the ceo has been stressing today is that the company's plan is to continue to increase returns to shareholders. -- this from february is a continuing, ongoing plan. maybe that gives you a hint. investors, telling stick with us and we will give you more cash return. >> all right, david, thank you so much. china has set ambitious targets to curb carbon emissions by 2030. they get there, we will have to add the clean energy equivalent of spain's entire capacity every year.
china's biggest producer of nuclear energy, cgn power, is poised to capitalize on the ambitious energy targets. it is due to list in hong kong this month. senior analyst joseph is here. a lot of buzz about this. tell us about cgn. >> the balance is because of the choice about investors have. they may raisee, as much as $3.2 billion, a very large amount. two, it is going to be a pure nuclear power producer. that is very unique within asia. i think it is a very small remaining company which is up reur nuclear producer -- a pu nuclear producer. also, it is a clean energy angle. china is pushing for cleaner energy.
it takes quite a few boxes. in terms of your choice, now you can buy renewable energy stocks, you can buy conventional energy stocks, but there is nothing available when you want nuclear. $3.2 billion, what are they doing with that money? >> another good question. they are expanding. going to grow is by 75% between now and 2019. there is a lot of nuclear reactor construction. number two, they are acquiring some more nuclear reactors from its parent. also, they are expanding overseas. they want to develop nuclear power reactors overseas. >> you talk about that addiction to the coal in china. this is huge.
what are the prospects of nuclear energy in the country? >> the government is really pushing nuclear, but they don't want to do it at the speed that they did for wind. -- the capacity is going to be troubling between 2014 and 2020. from less than 20,000 megawatts to almost 60,000 megawatts. growth is going to be humongous. that is going to help china with a gradual shift away from coal. it is not going to happen overnight, but the more nuclear, wind, gas, hydro, the more they will be able to reduce. there any concerns that investors need to know about? nuclear -- accidents are unforeseen. companies spend an enormous
amount in terms of safety checks and equipment on the safety side, but there is also the other side of things. to operate a nuclear power limitation ons a how many people have experience. with that fast growth, will they have enough people to open the power plants, and is that a risk? >> quite a bit of trading ahead as they put in the resources for all this. thanks forbelli, joining us this morning. of ther a look at some other corporate headlines making news today. sharesai focsun expected to resume trading in shanghai and hong kong today. proceeds from the sale will be used to develop other areas in
the business. fosun says the deal will require government approval. deutsche bank getting back on precious metals. it will no longer trade the actual commodities but will deal in derivatives. it is part of a larger overhaul to boost profitability. barclays, credit suisse and jpmorgan have made similar moves. tole may lose market share samsung in russia after it hiked iphone prices to cope with the falling ruble. the moves come after samsung slashed lxe prices by 20%. the cost difference may give android sellers a boost. those are the company news. i'm haslinda amin. japanese carmakers have recalled more vehicles over faulty airbags. toyota is checking more than 100,000 cars. let's go to craig in tokyo. what is behind these new recalls?
a substantial portion of those cars being recalled are related to takata airbags. this is traced back to the same defect that honda recall cars for a couple weeks ago. honda found some problematic .ssues at a plant in georgia that plant is now closed. that caused a fatal accident in malaysia this summer, that was the fifth death that we are aware of that has been caused by these ta kata airbags. about57,000 models, 40,000 of those are in japan. ,one are in the u.s. market where is substantial amount of the recalls are occurring related to takata airbags. nissan and suzuki also made
recalls yesterday. what were those problems? biggere were much recalls in terms of number of cars affected. but they were much less serious problems. you had with suzuki about 350,000 cars that are going to be repaired because of brackets that may make it difficult for drivers to adjust the position of their seats. you had nissan recalling about 250,000 cars to repair fuel pumps. those two defects, much less serious in scope, but substantially more cars being called back. number of carshe being called back this year and the last couple of years, you are seeing that for every high-profile incident that is very serious, carmakers are doing recalls for much less scary issues, but just a change
of culture where you have to call the eccles back for problems that you might not have done a recall for in the past. >> this is u.s. regulators aiming for more of a nationwide recall for takata. , thank you.l still to come, crude slumps to the lowest level in years. we will look at the opec decision behind the slide. stay with us. ♪
maintaining the status quo. , sayinga proposed a cut it is necessary to reduce output to prevent prices from going to $60 a barrel and below and perhaps staying there for a long time. opec decided it can sustain those lower prices if necessary, believing they won't be around for a long time. they also hoped that some non-opec producers, namely shale producers in the u.s., may not be able to suffer that pain as easily and may have to exit the market. ryan chilcote, bloomberg. dominic,g us now is head of commodities and fx for asia at ubs. thank you for joining us this morning. we got a half and half response this cut inpecting global production, not to cut
rather. were you expecting this at all? >> we gave it a 50% probability that opec would cut. there was a high probability, 40%, they were not going to do anything. we leave it up to the market forces. that means further downside. in the environment where opec is not trying to balance the market, we need to save the marginal supplier. that is north america. they are operating at a lower level than we are right now. >> looking at your report, you finest or final hour. >> the fact that they didn't cut is not because they have no choice. they have a choice. the market is oversupplied. next year, there is some oversupply, probably much less. they are already 0.5 million
barrels in production reduction. it is really a choice. i think it is really in the hands of the saudi's to say, we are not happy with the price, we want to see what the market is going to do without our help. they arect that letting the market decide on these prices, is this a new era for opec? what do you see on that? surprised to be see an emergency meeting happen in the first half of next year given the price is probably going to be under pressure. the read is, clearly saudi's want to test where shale oil is breaking. angle, it is a new era. not everybody is happy and that is clear from some of the messages from other opec
members. they wanted to reduce production. apparently not with the saudi's. oil,en we talk about shale they said this opec policy will actually ensure a crash for the industry. what do you think about that? >> it is definitely going to be a challenging environment. supply growth will definitely come down. prices need to come down to really hit the marginal producers. the high cost guys in the u.s. will be hit. that is the mechanism. the question is, who has the deepest pockets? clearly, the saudi's have very deep pockets. to a lesser extent, some of the shale players. for the downside, that is what you need to look for. that is the key message here in the short run. prices can recover overtime.
you are going to see investment spending adjusted. we need to clear the overhang. that is more of a story for 2016. >> you talk about the shale oil. what prices, in terms of oil and crude, how low is it going to go before we see shale industries budge? >> we already see some producers being challenged. cost in the u.s. to $80.om 40 dollars up some of the guys will be challenged. we don't have much data from the past because shale is something new. we are in uncharted territory. what we know from history, in an environment where you leave it completely to supply and demand, prices trade into the curve. not just 10%, maybe 20% into the
welcome to the stock exchange. let's check in on what our reporters are watching this morning. trading underway in asia. i was looking for you. [laughter] i was trying to become. -- be calm. >> jx and her g, the story of the day. as you can see, down by 2.2%. not as much as forecast. oil.ess crude i will move on because clearly there are -- >> clearly. support for college students, basically helping them find departments, even organizing their training. now up 18% because they just tripled their first net income
forecast of $2 million. raising operating profit targets. >> more people going to college. >> that might be it. students need help when they are going to college. they college campus, they need all the guidance they can get. second place. >> not bad for friday. prices, itrop in oil is one of the stocks to watch. as our airlines and these other companies. obviously, someone else picked the winner today. record.that has to be a >> children, we have children. >> that is the verdict from the stock exchange. reporters' picks are based on news events. thank you for your hits today. that is it from "first up" today. "on the move."
all right. ."at is it for us on "first up reshot, you are talking about "on the move" in the next hour. >> we have seen brent and crude on the way down. wti is down about 6.7% at the moment. that,plications of interest rate cuts in the u.s. where there are very few subsidies. what we do have is that potential to spur economic growth around the world. not such great news for russia. the ruble taking a pounding. let's also look at the first ever internet debate taking place in japan. that is happening tomorrow. , weeven different sites said. twitter japan, yahoo!. >> we have a different apartments -- participants including shinzo abe. trying to get to the young.
shares soaring in asia, rising after opec fumbles for crude. v for anything in japan? the government not getting the inflation it once. new fair and efficient of china coming to the stock exchange right here in hong kong. oil plummeting. opec refusing to cut production. saudi arabia blocked any idea of an output cut. john dawson is here to explain why. what has been the reaction from the othe